How a no-deal Brexit could ruin the great British breakfast

The threat of a no-deal Brexit is back on the agenda, threatening to upend the seamless trade between Britain and the rest of Europe that businesses have relied on for decades.

Among the most at risk: suppliers of fresh fruit and vegetables.

Theresa May’s decision to resign Friday raises the possibility that the UK's next prime minister could seek to leave the European Union without an agreement spelling out the terms of its exit. If that happens, customs checks could be reinstated at the border, leading to delays at ports.

That is a big concern for exporters and importers of fresh produce, which can appear in British wholesale markets the same day it is picked in continental Europe. Delays could hit quality, threatening longstanding business relationships and frustrating consumers.

Britain gets about 30% of its food from EU countries, according to the UK government, with the percentage of some items, like tomatoes, much higher at about 80%.

Dutch firm DailyFresh Logistics, which supplies tomatoes from the Netherlands to the U.K., has been in contact with Dutch customs authorities to ensure it can mitigate any delays and still deliver produce before it spoils.

But months after asking, it still hasn’t heard back from British customs on possible new requirements and isn’t sure whether it will be able to stick to current delivery times that bring produce at peak freshness to British households.

How long tomatoes will take to reach the UK after Brexit “completely depends on British customs,” said sales manager Pim Leenheer. “It’s not clear yet how long it will take for customs to check everything.”

The lack of clarity illustrates the uncertainty and potential implications facing businesses big and small in the U.K. and continental Europe.

Tomato growers in the Netherlands start harvesting their crop as early as 6 a.m., and within hours, 60 DailyFresh trucks are collecting produce from across the country. By noon, tomatoes bound for the U.K. that day are arranged according to their final destination in the company’s warehouse opposite the ferry terminal in Hoek van Holland, a port town in the southwestern corner of the Netherlands.

Ninety minutes later, the outbound pallets of tomatoes have been loaded onto trucks in time for either the 2:15 p.m. departure across the North Sea to Harwich or the 3 p.m. ferry to Felixstowe, both in the east of England.

Upon arrival, trucks of produce fan out across Britain. As early as 11 p.m. the tomatoes are available to buy at wholesale markets like New Spitalfields in London. DailyFresh’s customers include brokers, retailers, growers, exporters and importers.

Like businesses across various industries, DailyFresh is girding for a no-deal Brexit, under which free movement of goods from Europe to the UK ends.

A report from the Organisation for Economic Co-operation and Development estimates the Dutch agri-food sector would experience a 22% fall in its UK exports after Brexit if trade relations are covered by World Trade Organisation rules.

Mr. Leenheer said DailyFresh has made arrangements to prepare its trucks earlier so officials have time to conduct quality checks and inspect export and import papers that could be required. Certain taxes might also have to be paid before trucks can board ferries, adding to delays.

Currently the company needs just a single document: a basic freight letter.

“We didn’t have any experience on working with documents because we’ve never had to,” said Mr. Leenheer who is part of DailyFresh’s internal Brexit working group, set up shortly after the U.K.’s 2016 referendum on EU membership.

Ferry and terminal operator DFDS Seaways also has made contingency plans. It has applied for a permit to temporarily store goods before they are shipped and for a license to export outside the EU.

DFDS executives have worked with customers, customs and port officials to develop a website they hope will speed up any additional customs checks.

The site, which is ready to be implemented if existing customs arrangements change, would allow companies to file customs declarations online in advance to avoid manual checks that could slow things down, says Lucien Stotefalk, a DFDS executive in Vlaardingen, near Rotterdam, where ferries leave for Felixstowe.

DFDS is talking to port authorities about finding extra parking around the terminal in case drivers don’t have their export documents ready.

Mr. Stotefalk said DFDS has spent hours briefing customers about additional paperwork and is setting up its own customs brokerage business so it can file documents on behalf of customers if needed.

“We want to eliminate as much as possible the congestion,” he said. “You do not expect each and every customer will have their documents processed by the time they reach the gate, especially at the beginning.”

Source: Hellenic Shipping News